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Hints Of Fed Rate Cut Pulls Up Stocks—Latest Report

Stock markets across United States witnessed a spurt early this week on rumors that Federal Reserve may announce a rate cut which put fears of escalating trade war of US with its trading partners on the back seat. The Dow Index finished with gain of 2.1 % and went up by 512 points, while Nasdaq went up by 2.7 % displaying their best performance since 4 Jan. The S&P 500 index ended up by 2.1 %. This was a big relief for punters that were sweating due to trade war with China and expected tariffs on imports from Mexico.

US markets witnessed good growth which accelerated higher due to comments by Jerome Powell, Chairman of Federal Reserve who stated that market and trade developments were being closely monitored by Central Bank and they will act appropriately to sustain expansion. Since these remarks were made just after observations by Fed President James Bullard that Central Bank should reduce interest rates due to weak inflation and risky economic growth it spurred expectations of rate cuts in the immediate future. As he is part of the voting team that sets Fed rates his comments spurred investors and market forces. He made these statements to calm down investors that were worried about Chinese trade war.

FedWatch tool CME stated that around 65 % of the market expects interest rate cuts at July meeting of Federal Bank. Chief financial economist of MUFG Chris Rupkey stated that expectations of interest rate cuts have been growing for several weeks now and they climbed higher after President Trump threatened neighboring nation Mexico with new tariffs. Rupkey has also affirmed that economic data does not show any signs of recession which would prompt Federal Bank to reduce rates. Mr. Trump had been requesting the bank to reduce rates for several months now to stimulate US economy.

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American – Qantas Venture Now Has The US Regulators Approval

The US Transportation Department is assumed to offer a provisional approval to a bid planned by American Airlines and Qantas Airways to function as a joint venture. The ventures hope that the department provides a tentative approval for the joint business agreement and temporarily allowing antitrust immunity. The order is believed to be approved by this week. The basic reason for the order is to safeguard the competition and also let the government supervise the venture. The American and Qantas’s application for a joint venture covering the US, New Zealand, and Australia had earlier been canceled in November 2016 by President Barack Obama’s administration due to the objection from rival carriers Hawaiian Airlines and JetBlue Airways.

The regulators in Australia and New Zealand had accepted the application even though the US Transportation Department had rejected it. The benefits of the joint business for customers are quite high. In 2018, another attempt was made by American and Qantas in February for the US regulatory permission in the President Donald Trump’s administration so as to help them coordinate prices and schedules or else threatened to cancel all its services and also open $310 Million on a yearly basis in the consumer benefits.

The new application had changes like the removal of the provision that had prohibited one carrier codesharing it with the other. The joining would lead to a fall in the fares and higher capacity. It could help improve the services and also enhance the demands. If the application was to be accepted then it would lead to 180,000 new trips between the United States and Australia and New Zealand yearly. The cancellation would lead to rejection of flight services Qantas in Dallas or Fort Worth and Sydney plus reduction of services by Americans in Los Angeles, Auckland, and Sydney. In 2001, similar joint venture agreement was accepted by the US regulators for the United and Air New Zealand and also for Delta Air Lines and Virgin Australia in 2011.

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Supreme Court May Review Its Historic Indiana, Roe vs Wade Abortion Case

Supreme Court might indicate on Tuesday that the institution is willing to revisit a verdict taken on old abortion case of Roe v. Wade. Certain orthodox laws have been introduced in states like Alabama and Georgia making abortion restrictive. The old laws of women having complete constitutional right to terminate pregnancies have been nullified. The recent verdict on abortion was made after approval from Justice Brett Kavanaugh who was appointed in the panel by President Trump. His addition in the jury inclined towards the conservation decision that was made.

These recently passed laws would take time before getting passed from top courts of the country as well as lower courts. However, there were two laws that restricted abortions in Indiana back in 2016. Those were signed by contemporary Gov. Mike Pence which would soon be reviewed. Justices did a confidential meeting on May 24th 2019 in order to vote whether or not the case should be reviewed at all. The result of the meeting is scheduled to be announced on May 28th 2019. Four votes are needed for the court to take up the case.

One law of Indiana states that abortion cannot be done in discriminatory cases. For instance, discriminations of race and disabilities of the baby would not be entertained. Another law says that an ultrasound test must be done 18 hours prior to abortion. However, the lower courts did not let the laws execute. Experts have predicted that Supreme Court would not decide by the most restrictive law even if the case is reviewed.

The five orthodox judges are unlikely to let the previous verdict turn upside down. There are higher chances that the case might be weakened rather than being eliminated. Reproductive Rights groups might take it differently in case of absolute reversal of the verdict. A lawyer from American Civil Liberties Union said that they do not want to see complete change of verdict in Roe v. Wade case.

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Some Tesla Sites Now Restrict Supercharging To 80%

Tesla has started placing a restriction on some Supercharger stations in a bid to lower wait times. In a worker memo seen by the media, the auto manufacturer claimed that it has launched a function that will restrict users’ State of Charge to 80%, offering more users a chance to charge faster. That claimed, it will only impact select high traffic locations, specifically 17% of all its sites in North America

The restriction will be implemented at 8% of the stations permanently at all times, while another 9% will be impacted by the restrictions during the holidays or when there are huge events such as Coachella. A Tesla spokesperson claimed to the media that 17% of the firm’s Supercharging websites will put into effect the restrictions at any given time. Tesla claims that users that stop by at an impacted station will get a notification about it, so they do not get taken by shock.

Although the restriction will be an enduring feature at some sites, there appears to be a method to get past it for those who actually require that additional juice for lengthy trips. Media claims that they just require to make certain they are routed to a Supercharger on the way to their location and do not identify the station as the last stop.

On a related note, when Tesla removed free Supercharging as a referral award, it claimed that the advantage was “including too much prices to vehicles.” Even so, the auto manufacturer clearly recognizes it is something that potential users would be grateful for, since it is kind of bringing back free Supercharging. Media has found that it is back as an advantage again, although only for inventory Model X and S cars. Also, it only applies to the earlier models that do not come with the hardware updates Tesla declared in April.

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Fall In Lyft, Uber Shares Post IPO—Source Of Joy To Some Drivers

Few drivers have blamed Uber and Lyft for mistreating and low payment to drivers. They have received some satisfaction in the fact that the market has recently been uninterested in investing in these companies. However, they are also aware that if the company comes under pressure, the days would become difficult for them as company would seek for cutting costs. Be it in interviews or messages on internet, drivers were seen cherishing the loss of executives, shareholders and investors who have bought shares of the company just before a decline showed doubts regarding the longevity of Lyft and Uber.

A Reddit user even went to the extent of writing “Burn baby burn!!!!” for Uber drivers in some group soon after the stock price of the company fell. He also mentioned that he had once been a driver for a long time and was screwed. Therefore, now he would take joy at seeing their miserable state. Several other drivers said that they weren’t happy to see the company suffer losses. However, they hoped that better result would lead to their better treatment. The shares for both Lyft and Uber have been lesser than their selling cost for public debut for 2019. However, they were able to recover a bit from the decline because of a huge market rally.

On May 16, 2019, share of Lyft was priced at $56 which is quite low compared to $72 which is their IPO price of a share. Uber’s share was at $43, lower than that usual IPO price of a share at $45. There has been a lurking tension between drivers and management. They went for a strike of a few hours in various cities throughout the country. It would be a prolonged struggle for both the categories. Company would not stand without the drivers and drivers have number of options in the labor market.